Shanghai Four companies from China’s southern island province of Hainan have signed up for trial ­shipments of West Australian live cattle in a further sign of the country’s surging demand for high quality beef.

The timing of the shipments will depend on China’s introduction of an official animal health protocol but the WA government has said previously they could start within 12 months.

A series of agreements were signed with companies from the eastern ­province of Zhejiang in April and if the trials are successful, it is expected demand from China could quickly reach 100,000 head a year, worth roughly $200 million. That would make China the ­second biggest market after Indonesia.

WA Minister for regional ­de­velopment
Terry Redman
, who was in Hainan on Thursday for the signing of the agreements, said the island’s ­geography was similar to Indonesia where the live cattle trade “worked very well". The deals are between the four ­Hainan-based companies and the WA Livestock Exporters Association.

Mr Redman said Hainan had ­“reasonable infrastructure" to process the meat. Hainan is the most popular domestic destination for luxury travel in China, and boasts a large number of beachside five-star hotels, most of which serve high-quality beef.

Mining billionaire Andrew Forrest has also set his sights on the live cattle trade with China and along with ­agricultural company Elders is ­reportedly in talks with a Hainan meat processing company.

Earlier this year, Mr Forrest bought two Pilbara cattle stations, tripling his pastoral land holdings. He also spent more than $30 million last month buying WA beef processing company Harvey Beef.

The opening up of live cattle exports to China is likely to increase investment in herd sizes, boost the value of grazing land and push up prices of beef.

Related Quotes

Company Profile

However, it is contingent on the signing of a protocol, which has been a long and drawn out process as China is concerned about the Bluetongue virus. WA is hoping to get around the issue because much of the state falls outside the Bluetongue virus zone, which stretches from Broome across northern Australia to Sydney.

China is also protective of its local farming industry, with the stated aim of being self-sufficient in staples such as wheat, corn and rice.

However, Mr Redman said China’s demand for beef, driven by a fast-growing middle-class, far outstrips local supply. There are also commercial opportunities for Chinese companies to fatten up the cattle and process the meat.